Merger of Equals: The Integration of Mellon Financial and The Bank of New York (C) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Merger of Equals: The Integration of Mellon Financial and The Bank of New York (C)
[Continuation of "A" and "B" cases.] Less than a month after the close of the merger between The Bank of New York and Mellon Financial, managers at the two firms realized that plans for combining their asset servicing businesses - and realizing the $180 million of annual cost savings that they had promised Wall Street - were fraught with risk. Senior executives must evaluate the seriousness of the risks and identify alternative ways of integrating the two firms, while safeguarding the technologies that process and clear a substantial fraction of the world's financial transactions.
Authors :: Ryan D. Taliaferro, Clayton Rose, David Lane
Swot Analysis of "Merger of Equals: The Integration of Mellon Financial and The Bank of New York (C)" written by Ryan D. Taliaferro, Clayton Rose, David Lane includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Mellon York facing as an external strategic factors. Some of the topics covered in Merger of Equals: The Integration of Mellon Financial and The Bank of New York (C) case study are - Strategic Management Strategies, Mergers & acquisitions, Technology and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Merger of Equals: The Integration of Mellon Financial and The Bank of New York (C) casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, technology disruption, increasing transportation and logistics costs, talent flight as more people leaving formal jobs, increasing inequality as vast percentage of new income is going to the top 1%, increasing government debt because of Covid-19 spendings, geopolitical disruptions,
digital marketing is dominated by two big players Facebook and Google, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Merger of Equals: The Integration of Mellon Financial and The Bank of New York (C)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Merger of Equals: The Integration of Mellon Financial and The Bank of New York (C) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Mellon York, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Mellon York operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Merger of Equals: The Integration of Mellon Financial and The Bank of New York (C) can be done for the following purposes –
1. Strategic planning using facts provided in Merger of Equals: The Integration of Mellon Financial and The Bank of New York (C) case study
2. Improving business portfolio management of Mellon York
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Mellon York
Strengths Merger of Equals: The Integration of Mellon Financial and The Bank of New York (C) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Mellon York in Merger of Equals: The Integration of Mellon Financial and The Bank of New York (C) Harvard Business Review case study are -
Effective Research and Development (R&D)
– Mellon York has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Merger of Equals: The Integration of Mellon Financial and The Bank of New York (C) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Operational resilience
– The operational resilience strategy in the Merger of Equals: The Integration of Mellon Financial and The Bank of New York (C) Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Low bargaining power of suppliers
– Suppliers of Mellon York in the sector have low bargaining power. Merger of Equals: The Integration of Mellon Financial and The Bank of New York (C) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Mellon York to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Mellon York is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Ryan D. Taliaferro, Clayton Rose, David Lane can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Diverse revenue streams
– Mellon York is present in almost all the verticals within the industry. This has provided firm in Merger of Equals: The Integration of Mellon Financial and The Bank of New York (C) case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Cross disciplinary teams
– Horizontal connected teams at the Mellon York are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Highly skilled collaborators
– Mellon York has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Merger of Equals: The Integration of Mellon Financial and The Bank of New York (C) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Mellon York digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Mellon York has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Ability to lead change in Leadership & Managing People field
– Mellon York is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Mellon York in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Ability to recruit top talent
– Mellon York is one of the leading recruiters in the industry. Managers in the Merger of Equals: The Integration of Mellon Financial and The Bank of New York (C) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Sustainable margins compare to other players in Leadership & Managing People industry
– Merger of Equals: The Integration of Mellon Financial and The Bank of New York (C) firm has clearly differentiated products in the market place. This has enabled Mellon York to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Mellon York to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Mellon York has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Mellon York has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Weaknesses Merger of Equals: The Integration of Mellon Financial and The Bank of New York (C) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Merger of Equals: The Integration of Mellon Financial and The Bank of New York (C) are -
Aligning sales with marketing
– It come across in the case study Merger of Equals: The Integration of Mellon Financial and The Bank of New York (C) that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Merger of Equals: The Integration of Mellon Financial and The Bank of New York (C) can leverage the sales team experience to cultivate customer relationships as Mellon York is planning to shift buying processes online.
Increasing silos among functional specialists
– The organizational structure of Mellon York is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Mellon York needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Mellon York to focus more on services rather than just following the product oriented approach.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Merger of Equals: The Integration of Mellon Financial and The Bank of New York (C), is just above the industry average. Mellon York needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High cash cycle compare to competitors
Mellon York has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High bargaining power of channel partners
– Because of the regulatory requirements, Ryan D. Taliaferro, Clayton Rose, David Lane suggests that, Mellon York is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Lack of clear differentiation of Mellon York products
– To increase the profitability and margins on the products, Mellon York needs to provide more differentiated products than what it is currently offering in the marketplace.
Workers concerns about automation
– As automation is fast increasing in the segment, Mellon York needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Capital Spending Reduction
– Even during the low interest decade, Mellon York has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Merger of Equals: The Integration of Mellon Financial and The Bank of New York (C), it seems that the employees of Mellon York don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Interest costs
– Compare to the competition, Mellon York has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Need for greater diversity
– Mellon York has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Opportunities Merger of Equals: The Integration of Mellon Financial and The Bank of New York (C) | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Merger of Equals: The Integration of Mellon Financial and The Bank of New York (C) are -
Manufacturing automation
– Mellon York can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Mellon York can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Developing new processes and practices
– Mellon York can develop new processes and procedures in Leadership & Managing People industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Loyalty marketing
– Mellon York has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Mellon York can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Mellon York can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Building a culture of innovation
– managers at Mellon York can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Leadership & Managing People segment.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Mellon York can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Mellon York can use these opportunities to build new business models that can help the communities that Mellon York operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Buying journey improvements
– Mellon York can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Merger of Equals: The Integration of Mellon Financial and The Bank of New York (C) suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Mellon York to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Mellon York can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Mellon York in the consumer business. Now Mellon York can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Mellon York to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Mellon York to hire the very best people irrespective of their geographical location.
Threats Merger of Equals: The Integration of Mellon Financial and The Bank of New York (C) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Merger of Equals: The Integration of Mellon Financial and The Bank of New York (C) are -
Regulatory challenges
– Mellon York needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Leadership & Managing People industry regulations.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Mellon York can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Merger of Equals: The Integration of Mellon Financial and The Bank of New York (C) .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Mellon York in the Leadership & Managing People industry. The Leadership & Managing People industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Shortening product life cycle
– it is one of the major threat that Mellon York is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Mellon York in the Leadership & Managing People sector and impact the bottomline of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Mellon York with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Mellon York business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Merger of Equals: The Integration of Mellon Financial and The Bank of New York (C), Mellon York may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Mellon York will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Environmental challenges
– Mellon York needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Mellon York can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Mellon York.
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Mellon York can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Mellon York
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Mellon York.
Weighted SWOT Analysis of Merger of Equals: The Integration of Mellon Financial and The Bank of New York (C) Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Merger of Equals: The Integration of Mellon Financial and The Bank of New York (C) needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Merger of Equals: The Integration of Mellon Financial and The Bank of New York (C) is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Merger of Equals: The Integration of Mellon Financial and The Bank of New York (C) is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Merger of Equals: The Integration of Mellon Financial and The Bank of New York (C) is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Mellon York needs to make to build a sustainable competitive advantage.
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